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Media Releases
2005

18 November
2005

Insolvency update

Getting paid quicker (or dealing with Court of Session reporter applications!)

From time to time you instruct us to submit applications on your behalf to the Court of Session to appoint a reporter and have your remuneration fixed in cases where no liquidation committee has been appointed.

Traditionally these applications have been dealt with as routine procedural applications but it now seems a harder line is being taken by the specialist insolvency judges (Lord Clarke, Lord Drummond Young and Lord Reed) who consider these applications. It is becoming more common for the judges to call for a hearing unless the application contains all the necessary information.

Any hearing would require counsel or a solicitor advocate to attend and would lead to added expense and prolonged delay, both of which we are keen to avoid.

The change of approach has two main practical implications:

1) Time limits
The court is now enforcing more vigorously the requirement that accounts be audited within 6 weeks of the end of each accounting period. We appreciate that this is not always possible or cost effective but you should consider the following:

  • Regular submission of accounts for audit is to be undertaken unless there is a proper justification not to do so.
  • Please provide us with full details of why it was not possible or appropriate to submit accounts for audit in line with the statutory requirements.
  • The more information that we can provide to the court to satisfy their enquiries, the more likely we are to be able to avoid the motion being put out for a hearing before the court.

2) Court reporter
The court has a list of insolvency practitioners who are approved to act as court reporters. We understand that the court will appoint reporters on a rotational basis. The court is not inclined to allow a particular practitioner to be nominated for appointment without good reason. We have however been successful in having a nominated insolvency practitioner appointed where there are special circumstances, for example where the nominated reporter has previously audited accounts for earlier periods.

Unless there are special circumstances that can be objectively justified to the court, our experience is that applications for the appointment of a nominated insolvency practitioner are likely to be refused.

Please contact Gillian Carty if you would like to be kept updated on developments.


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